On the day in July that a group of investors led by WME-IMG purchased the UFC, a reporter asked Dana White if fight fans should be concerned about the company’s future under its new corporate overlords.
“Exact opposite,” the UFC president said, according to ESPN.com's Brett Okamoto. “Sport is going to the next level.”
Despite White’s bullish attitude—he personally made an estimated $360 million on the sale, according to MoneyNation—concerns were understandable. After a decade-and-a-half of wildfire growth and seat-of-the-pants evolution under previous majority owners Frank and Lorenzo Fertitta, the MMA industry had grown accustomed to having things a certain way.
Fast-forward a bit more than three months and Okamoto’s question seems more relevant than ever. Last week, WME-IMG began leaving its first notable fingerprints on the UFC brand, announcing layoffs of nearly 15 percent of the fight promotion’s pre-existing staff.
This wasn’t necessarily a surprise. Considering the eye-popping $4 billion WME-IMG paid to acquire the world’s largest MMA organization—and the reportedly risky loan it took on to make it happen, per the Wall Street Journal—the new owners couldn’t afford to waste time in streamlining and reshaping the UFC’s future.
Still, as an introduction to the WME-IMG era, it made for fairly dramatic theater.
Until the layoffs, the mega-talent agency’s takeover of the MMA world appeared subtle and measured. Suddenly, it read more like a tectonic shift. As the specifics of the cuts began to trickle out, Bleacher Report Senior Columnist Josh Gross reflected on them with notable awe—and maybe a touch of unease:
Indeed, it already feels as though things are irrevocably changed, and veteran MMA reporter Dave Meltzer thinks the process is just getting underway.
“WME-IMG want to bring in their own people,” Meltzer said on a recent episode of Wrestling Observer Radio, via Forbes.com’s Matt Connolly. “I’ve been told that by January it will be a very, very different company.”
A major thrust of that change must be to limit overhead and increase profits. Given WME-IMG’s track record and tremendous clout in the sports and entertainment industries, there should be little doubt it can pull it off too.
That “next level” White talked about might be along sooner than anyone expected.
To most, however, the billion-dollar question is not whether WME-IMG will succeed in meeting its own future profit goals. (Spoiler alert: It probably will.) The question is: Will the UFC’s “next level” be any better for fans—or for UFC fighters?
So far, it’s too early to tell, though perhaps there are some reasons for optimism.
The tremendous promise of a WME-IMG-owned UFC has been obvious from the jump. The Los Angeles-based giant enjoys resources and connections far beyond anything the MMA industry has seen before.
As MMAjunkie’s Ben Fowlkes explained in a deep dive into WME-IMG’s history and business practices, the UFC now has a Hollywood super heavyweight in its corner:
… WME-IMG represents athletes, actors and musicians. It handles licensing and marketing for more than 200 college sports teams. It owns an e-sports league and a bull-riding organization. It has negotiated TV deals for European soccer and Indian cricket leagues. It runs Fashion Week events all over the globe, and represents several top models and designers. It owns the Miss Universe pageant, which it bought from former client and current Republican presidential nominee Donald Trump. It represents Oprah Winfrey and Dwayne “The Rock” Johnson.
If it’s on a TV or movie screen, if you can buy a ticket to see it in a major arena, if it involves any sort of on-air talent or professional athlete, chances are good that there’s a WME-IMG tie-in somewhere. And as recent moves have shown, the company isn’t afraid to open up the checkbook when it sees the chance to own something that will strengthen its grip—especially when it comes to new or emerging sports.
On the other hand, MMA fans have learned the hard way recently that “bigger” and “more profitable” don’t always mean better.
Take, for example, the organization’s current broadcast deal with Fox Sports.
The seven-year, $100 million-per-year TV contract was hailed as the final step toward mainstream acceptance when it was signed in 2011. Unfortunately, the end result has been somewhat different than expected.
In addition to its own international expansion efforts, the new agreement suddenly put the UFC on the hook to Fox for a slew of programming across three different platforms. As a result, the promotion’s menu of live events ballooned to nearly 50 per year and the number of fighters on the active roster to more than 500.
What fans got was oversaturation. They got watered-down lineups and—at least for many—the increased cost of paying providers for upper-tier cable packages that included the fledgling Fox Sports 1.
So even as the UFC’s TV deal brought the company a significant influx of cash and exposure, fans got the short end of the stick. They got an arguably inferior product at an increased price.
So, what can WME-IMG do differently? What can it do better?
On the TV side, the fix seems obvious: Fewer total UFC events each year would ensure better overall quality—and the new owners may already be moving in that direction.
Rumors are percolating that 2017 will see a reduction in the number of UFC events, and Flo Sports’ Jeremy Botter suspects that when the UFC’s current TV deal lapses in 2018, the new owners will move away from exclusivity. Instead of offering up their entire product line to a single television network, they could well shop bits and pieces of UFC programming to a number of different suitors.
If successful, such a move could increase the UFC’s television revenue. It could also make things less unwieldy and expensive for fans—if the bulk of UFC programming winds up on more widely available cable channels than just FS1.
Obviously, cutting back on the number of fight cards would be a double-edged sword. It would mean UFC fans in international markets might end up waiting longer before the Octagon once again makes the trek to their town. It would also likely come hand in hand with trimming the number of fighters on the active roster.
Then again, if in a couple of years WME-IMG redoubles its international expansion efforts in a more cohesive and meticulous way than old ownership ever did, all the better for international fans. On the athlete end of things, Bleacher Report’s Jonathan Snowden also reports many of those fighters’ exclusive UFC contracts might allow for them to be reassigned to smaller organizations.
This might allow those cut fighters to land on their feet and even to stay in the pipeline for an eventual UFC return.
For the fighters who remain, there would be other ways to improve on the old way of doing things.
The Fertitta brothers were nothing if not steely-eyed businessmen—and an estimated revenue split between UFC ownership and its athletes of roughly 85 percent to 15 percent will eternally attest to that. If WME-IMG wanted to buy tremendous political capital inside the persnickety world of hardcore MMA fandom, a good start would be to cut in the athletes on a higher percentage of profits.
Is it naive to think the new owners, who must be most concerned with their own bottom lines, would do better by fighters than the previous regime?
Maybe. Probably. Then again, it’s just as tough to imagine the sport of MMA actually “going to the next level” while the disparity between management and labor is so dire.
So long as a significant percentage of UFC fighters are struggling financially, living check to check and working two jobs just to try to make ends meet, the sport will never truly evolve into the glitzy entertainment juggernaut it seems to aspire to be.
Perhaps WME-IMG could help with that in more ways than just beefing up fighters’ paychecks.
One of the great strengths of this new UFC should be for the parent company to take a more active role in establishing fighters as their own unique brands. For years, the Fertitta brothers chose to promote the organization over its actual athletes. It consciously made White—not any one fighter—the biggest star in the sport.
Now, however, the industry has come to understand the star-driven nature of the UFC’s pay-per-view business model. With individuals such as Conor McGregor and Ronda Rousey accounting for such a large portion of PPV sales, it only makes sense to try to cultivate and nurture new stars.
This approach would be right in WME-IMG’s wheelhouse, after all. The company, which represents actors and athletes all over the globe, is already basically in the business of turning its clients into distinct, promotable brands. It even runs an academy in Florida that readies standout high school athletes for the world of college and professional sports.
Why not do the same things for fighters?
More than anything, the trick will be enacting all these changes while making sure the UFC retains the unscripted “As-Real-As-It-Gets” feel that drew many hardcore fans to it in the first place.
For all their pragmatism and cold-blooded pursuit of riches, the Fertittas loved MMA. The UFC was their passion project, and they ran it—for better and worse—like a family business. White was their childhood buddy, and under his over-the-top leadership the company experienced unbelievable growth, sometimes feeling as though it was hurtling unbridled (and maybe unplanned) into the future.
It was the shiniest, most beloved jewel of the Fertitta business empire.
Even as WME-IMG seeks to convert the UFC from niche, multimillion-dollar mom-and-pop shop to sleek corporate high-rise, it should strive not to lose that energy.
The process is just getting underway, and it’s far too early yet to know what the end results will look like.
Clearly, however, the lessons of the recent past have taught us that increasing profits and improving the product offered by the UFC are two different things.
If WME-IMG’s primary goal is skyrocketing revenue, that’s fine. But that alone doesn’t constitute the sport going to the “next level.”
Along the way, some of that bounty must go toward building a better product for fans and building a better life for fighters.
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